Really annoying but with the past few versions of Local. It’s been like this for at least a few months. In short, somewhere along the line the version of boot2docker shipped with Local started breaking my local-by-flywheel VM. My only ‘fix’ is to go into my machine backups and grab a copy of the boot2docker.iso image and replace the one which Local keeps updating.

So I then booted the VM directly in Virtualbox in normal mode so I could see what happens.
I can see a kernel panic happening almost immediately. As soon as I drop in my older boot2docker.iso into ~/.docker/machine/machines/local-by-flywheel and then boot the machine again in normal mode the VM boots with no issues.
I can then load Local and use normally.

But a couple of days later it looks like the .iso file is again replaced by the newer version and I’m back to square one.